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How Monopolists Took Over Trash Collection and Undermined Recycling and Composting

If you follow Food & Power, you’ve probably learned that a handful of corporations control critical junctures along the food supply chain. But you may not know that this also applies to the very end of that chain: the business of hauling and storing food and packaging waste.

A recent report [[link removed]] by the Institute for Local Self-Reliance (ILSR) reveals that decades of dramatic concentration and privatization in the business of trash collection have undermined recycling efforts. By rolling up and vertically integrating an inherently local industry, Big Waste corporations pushed out thousands of local businesses, drove up trash collection costs, and adopted perverse incentives to send more goods to landfills.

The food system creates a massive portion of the waste in American landfills. Roughly 95% of Americans’ 40 million tons of annual food waste [[link removed]] ends up in a landfill. Packaging also generates roughly 28% of all U.S. waste – or more than 80 million tons [[link removed]] of municipal waste annually – and roughly two-thirds [[link removed]] of this waste comes from food packaging.

Only 23.6% of all U.S. municipal waste [[link removed]] was recycled in 2018, and just 5% of food and 9% of plastic waste was composted or recycled, respectively. This wastes the resources used to make these goods and harms the environment by sending them to landfills. Chemical inks and dyes from packaging, as well as degraded microplastics, leach into soil and groundwater [[link removed]], and plastic that finds its way into the ocean harms marine life [[link removed]] of all sizes. Food scraps in landfills do not have access to the oxygen they need to properly break down – as a result, a head of lettuce can take more than 20 years [[link removed]] to decompose, and this oxygenless decomposition releases a powerful greenhouse gas, methane.

To be sure, we need more policies [[link removed]] to reduce runaway waste creation at the source [[link removed]]. At the same time, we know that recycling food and packaging waste can be environmentally friendly, efficient, and profitable. A study by the EU [[link removed]:\Users\kellowayc_omi\Downloads\08%202011%20Earnings%20jobs%20and%20innovation%20.pdf] found recycling can provide more higher-paying jobs than landfilling or incinerating waste. However, in recent decades, a handful of waste monopolists has fought hard to inhibit recycling and keep products going into landfills.

In the mid-20th century, the waste industry was highly decentralized, with tens of thousands of businesses and small public and private landfills serving the country (including some controlled by the mafia [[link removed]]). Today just two corporations, Waste Management and Republic Services, control nearly half [[link removed]] of the remaining U.S. landfill capacity and run trash and recycling services for cities nationwide.

Trash collection is inherently local work, and even Big Waste executives have admitted [[link removed]] that there are no real efficiencies in operating on a national scale. But Neil Seldman, co-founder of the Institute for Self-Reliance and co-author of their latest report [[link removed]], argues that these corporations consolidated to build monopoly power.

With Wall Street backing (gained, in part, through falsified financial records [[link removed]]), a few national leaders started buying up mom-and-pop trash businesses. By the end of the 1990s, Waste Management had acquired 3,000 local haulers.

At the same time, these growing conglomerates vertically integrated into landfill management. In the 1970s, the federal government introduced new environmental standards for landfills, but unlike with similar regulations for wastewater treatment, there were few federal funds to help local governments comply. Without support, thousands of smaller municipal landfills closed, and, in their place, deep-pocketed waste corporations built massive, centralized, federally compliant facilities.

Moving landfills farther away from communities makes for longer trips to the dump and thus higher hauling costs. Combining trash hauling and landfilling also consolidates Big Waste’s private control over critical waste disposal infrastructure. “Vertical integration increased profits but not efficiency,” says Seldman. “It increased power over the market to dictate terms … [and] demand high prices for their goods.”

Big Waste expanded its power even further by taking over recycling. In the late 1990s, Wall Street began to fear that the growth of recycling would hurt waste corporations. “Recycling is primarily seen as a competitive threat because it steals volumes away from landfills, [waste companies’] most profitable assets,” one 1999 U.S. Investment Research report said [[link removed]].

As recently as 2000, some 56,000 companies and thousands of government programs ran American recycling. Today, a recently merged [[link removed]] Waste Management-Advanced Disposal, along with Republic Services, will handle two-thirds of all the recycling volume going to large material recovery facilities.

Vertically integrating landfilling and recycling creates a perverse incentive to send goods to landfill and recycle poorly. While stand-alone recycling facilities build their profitability around, well, actually recycling goods in order to sell quality recycled materials, Big Waste companies primarily profit from municipal recycling contracts. As such, they only strive to make their recycling facilities cost-neutral, and they ultimately generate far more profit for every pound of waste going to landfill.

For instance, Big Waste corporations try to lower their recycling costs by pushing too-good-to-be-true single stream systems, which are cheaper to collect but less effective at a large scale. In 2005, only 29% of Americans had single stream recycling systems, but by 2014 that figure rose to 93%, driven largely by Big Waste contracts. Concurrently, between 2008 and 2018, the percentage of contaminated recyclables sent to landfills rose from [[link removed]] 7% of all recycling to roughly 25%, according to the report.

Big Waste’s massive single stream facilities take in more recyclables than they can effectively sort and churn out contaminated, low-grade product. In DC, for example, Waste Management won the city’s recycling contract with a lowball bid for single stream services. But Waste Management drives up costs by hauling recyclables roughly 30 miles outside the city to a large facility in Elkridge, [[link removed]] Maryland, that can’t even [[link removed]] process glass [[link removed]]. In 2017, the District paid $120 per ton [[link removed]] of recycling, while nearby Baltimore only paid $20 per ton.

“Waste Management Inc. says, ‘We can do this cheaper’ … but then as soon as they have the contract, they change the conditions … and then they raise prices,” Seldman says.

Today, the push for food composting poses the same threat to Big Waste that recycling did 50 years ago. Food waste makes up about 22% of landfill volume, and Big Waste wants to profit from hauling it. Recently, waste corporations have successfully lobbied to overturn laws [[link removed]] that banned yard waste, a major source of industrial compost, from going to landfill. And in 2011, Waste Management bought a majority ownership stake in the largest composing facility in the Mid-Atlantic region, which some argue [[link removed]] contributed to its mismanagement and subsequent closure three years later.

While large waste corporations undoubtably wield market and political power to maintain the status quo, ILSR’s report argues that cities and local communities have many options to stand up to Big Waste.

States can reinvest in public landfills to retake critical infrastructure and chip away at the vertical integration that creates a profit motive to send more goods to landfill. Governments can also put more funds toward public or locally owned recycling and composting programs, fortified with waste diversion requirements. These investments can grow regional recyclers that are actually built around effective recycling instead of landfilling.

“The more we recycle without using their systems, the more we’re taking away their profits and their political influence,” argues Seldman.

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What We're Reading

After union and industry lobbying [[link removed]], food and agriculture workers will be included as frontline essential workers in the 1B priority phase for COVID-19 vaccination. (The Washington Post and the Centers for Disease Control [[link removed]])

After weeks of deliberation, here [[link removed]] is what Congress’ latest COVID stimulus bill means for the food industry. ( The Counter [[link removed]])

Whole Foods workers in the Detroit area are demanding [[link removed]] that the corporation require shoppers to wear face masks and reinstate health insurance for part-time employees as well as hazard pay, to support workers through the pandemic. ( Business Insider [[link removed]])

About the Open Markets Institute

The Open Markets Institute promotes political, industrial, economic, and environmental resilience. We do so by documenting and clarifying the dangers of extreme consolidation, and by fostering discussions of ways to reestablish America’s political economy on a more stable and fair foundation.

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Written by Claire Kelloway

Edited by Michael Bluhm

Open Markets Institute

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